Intersil Jumps on Speculation It May Become Takeover Target
April 05, 2011, 4:21 PM EDTBy Ian King
(Updates with closing share price in fourth paragraph.)
April 5 (Bloomberg) -- Intersil Corp., a maker of analog chips, surged the most in two years in Nasdaq trading on speculation it will become a takeover target following Texas Instruments Inc.’s agreement to buy National Semiconductor Corp.
The planned acquisition of National Semiconductor for a 78 percent premium to its closing share price yesterday has led to optimism that more semiconductor deals may happen, said Vernon Essi, a Boston-based analyst at Needham & Co.
“It was dramatically higher than what most investors would think and it actually works,” said Essi, who rates Intersil shares “buy” and doesn’t own them. “Intersil is a smaller-cap version of where National Semiconductor was before yesterday.”
Milpitas, California-based Intersil rose $1.02, or 8.4 percent, to $13.14 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have declined 14 percent this year.
Texas Instruments, the second-largest U.S. chipmaker, yesterday agreed to buy National Semiconductor for about $6.5 billion. Intersil might make a target for other companies that want to broaden their own product lines in response because its stock price-to-sales ratio is relatively cheap, said Doug Freedman, a Gleacher & Co. analyst.
The companies are makers of so-called analog semiconductors, which go into everything from military hardware to washing machines. The chips perform functions such as power regulation and the conversion of real-world inputs, like touch and sound, into electronic signals.
Brendan Lahiff, a spokesman for Intersil, declined to comment.
--Editors: Jillian Ward, Lisa Wolfson
To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
